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There seems to be some very switched on posters here looking at some of the other investment type threads, so here goes with my question. Please assume that i have no experience or knowledge in the field of investments, so replies in the simplest of terms would be appreciated.
I currently have a SIPP that is administered by Praemium. The SIPP contains a single investment property with no borrowing on it and that is giving a fairly good level of return. Now, alongside the property the rent that it generates is now building up and there is approximately £20k sat there earning the princely interest rate of 0.01%. So, i want to re-invest this sum to keep it working for me and to stop it from being eroded away by inflation. I have been thinking about opening a Vanguard Lifestrategy 60 account with this money and topping it up with future received rents from the property every 6 months. My question is, how do i do this? How do i physically open the Vanguard account within my SIPP? Is it a case of opening the Vanguard account in the name of the SIPP i wonder? Neither Praemium not Vanguard seem willing to provide any advice on how i to achieve what i am looking to get done here.
Over to you guys, some of whom must surely have been in this position personally.
TIA.
Lifestrategy 60 is not an account, its a fund (of funds) offered by Vanguard
(Vanguard offer have their own platform - whereby you open an account - ISA, SIPP etc and purchase their choice of funds)
Vanguard funds are widely available on many other trading platforms - and without having any experience of your Praemium SIPP - I'd be amazed if they didn't offer Vanguard funds- they're No.2 in the world of passive funds so usually available on every platform.
Another option is open a SIPP with another provider (Vanguard or whomever) and make a transfer of your cash to that account and purchase the fund through that account. Bit of a pain though as transfers between investment platforms can take a few weeks to complete.
HTH.
It's slightly confusing with Vanguard as they offer a fund management service and their own funds. So you can open an account with them as well as buying their funds through pretty much any SIPP / ISA provider who offers access to the market.
Vanguard, as a platform, would be the cheapest way to buy into Vanguard funds.
As above Vanguard directly through their own platform is the cheapest way to go but you can only buy their funds, they dont offer others or the option to purchase shares etc. If you use another platform (I use III) then you can purchase Vanguard funds from there. Their funds are very well thought of so that may be fine just something to consider.
I'd go direct to vanguard. Make sure it's actually their site, not an advert linking you somewhere else. From there it's very easy to open a sipp. You can then invest in a wide range of vanguard funds (including lifestrategy 60). Might be worth considering some other funds from them maybe buy 7k or so of three different funds then add to whatever fund you fancy as money allows. You need to check your allownces for tax relief but assuming you are an average earner then it should be fine.
I might also consider putting some into an ISA for slightly different benefits but that depends on other savings and long term plans
Subject to the rules set by Praemium, you can either invest the cash in Vanguard funds within the Praemium SIPP, or do a partial transfer of the SIPP, moving the cash to a Vanguard SIPP.
Not all SIPP providers allow partial transfers, so you'd need to see if Praemium do.
The reason to do one or the other could be the charges applied. If Praemium charge a flat fee, keep everything there. If they charge a percentage of the SIPP value (say 0.5%) it's probably cheaper to transfer to Vanguard, as their SIPP fees are 0.15%.
I might also consider putting some into an ISA for slightly different benefits but that depends on other savings and long term plans
You can't transfer SIPP to ISA without incuring a tax liability!
Easiest option is direct fund purchase through your existing SIPP, either call them or this may be available through an online portal. You may also be able to set up an instruction to reinvest rental income in the same fund. Much easier than partially transferring every so often, which could incur further charges.